The Idea Of Wind Turbine Sickness

An important point made by The Young Turks: Research has established that "wind turbine syndrome" is probably caused by something called the “nocebo” effect, a variation of the "placebo" effect: It’s induced by the suggestion that it will be harmful. From TheYoungTurks via YouTube

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Don’t Frack My Mother

Sean Lennon's lighthearted, rousing tune -- with a touch of "The Times They Are A-Changin'" -- raises the serious question of whether hydrofracking can be done safely. From ArtistsvsFracking via YouTube

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A Picture Of What’s Coming

Climate change deniers will still deny it but get used to seeing stories like this. It is “a postcard from the future.” From ClimateReality via YouTube

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WORLD’S OLD ENERGY SUBSIDIES DRIVE CLIMATE CHANGE

IMF: Want to fight climate change? Get rid of $1.9 trillion in energy subsidies.

Brad Plumer, March 27, 2013 (Washington Post)

“…[T]he simplest way to tackle global warming…[is making] sure that fossil fuels are priced properly and not subsidized…[according to Energy Subsidy Reform: Lessons and Implications from] the International Monetary Fund, which argues that the world ‘misprices’ fossil fuels to the tune of some $1.9 trillion per year…Eliminating these subsidies, the IMF argues, and replacing them with appropriate carbon taxes could cut global greenhouse-gas emissions by 13 percent, curtail air pollution, and shore up the finances of many poorer countries now in debt trouble…

“…[In 2011, there was] $480 billion in direct subsidies for consumption…[of] petroleum, natural gas, coal, and electricity for their citizens…[most] in developing nations, particularly in North Africa and the Middle East…The report argues that these subsidies are crowding out other useful public spending in these countries and depressing private investment in the energy sector…[G]lobal greenhouse-gas emissions would fall by up to 2 percent if all of these direct subsidies were scrapped…”

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“…[‘Externalities’ like the air pollution and climate damage CO2-emitting energies cause, which standard economic models value at about $25 per ton of carbon dioxide, result in] a subsidy of some $1.4 trillion worldwide…[C]ountries that subsidize fossil fuels most heavily are the United States ($502 billion per year), China ($279 billion per year), and Russia ($116 billion)…Correcting for all of this mispricing would reduce global greenhouse-gas emissions by around 13 percent, the IMF says.

“…[But the] United States and Russia are very far from considering a carbon tax, while the Chinese government is mulling over an extremely modest and fragmented carbon-pricing scheme…[I]n poorer countries, scrapping these direct subsidies tends to be extremely contentious…22 countries that have successfully managed to reduce or scrap their direct subsidies…[They] need to be phased out slowly and be paired with measures to mitigate the impact on the poor…[but] should be doable, since energy subsidies tend to…go to the top one-fifth of the population…”

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MIDDLE EAST AND NORTH AFRICA SUN TO GLOW

Middle East and Africa Photovoltaic Demand to Reach 1 Gigawatt in 2013…

March 20, 2013 (SolarBuzz)

“New solar photovoltaic (PV) demand from the Middle East and Africa (MEA) region is forecast to reach 1 gigawatt (GW) in 2013…This represents an increase of 625% Y/Y from 136 MW in 2012…[By 2017, it will have] 3.7 GW of annual PV demand, with the potential to reach up to 9 GW…{Despite very high solar insolation, it] accounted for just 0.5% of global PV demand in 2012, despite comprising 17% of the world’s population.

“…[F]ollowing the introduction of ambitious funding schemes, most notably in South Africa, Israel, and Saudi Arabia…the region is expected to account for 6% of global PV demand by 2017…South Africa is forecast to become the largest PV market within the MEA region, having completed the first two bidding rounds of the Renewable Energy Independent Power Producer Program (REIPPP) in 2012…[T]his program has created a PV project pipeline of 1 GW that will be installed by the end of 2014…[and] result in 1.45 GW of new PV capacity…Israel is expected to be the region’s second largest market in 2013, driven by quotas, tenders, and a newly implemented net-metering scheme…[The two will] account for more than 80% of all PV demand across the MEA region this year.”

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“PV funding in Saudi Arabia is based on a renewable purchase program that targets a PV capacity of 16 GW by 2032. Saudi Arabia accounted for just 5% of total PV demand in the MEA region during 2013, but the country is forecast to become the region’s largest PV market by 2017.

“Over the next five years, a greater number of countries across the MEA region will start to contribute to overall PV market, decreasing the share from Israel, Saudi Arabia, and South Africa to below 50%. By 2017, NPD Solarbuzz forecasts that ground-mount PV applications will account for over 70% of PV demand across the MEA region…”

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WORLD’S BIGGEST WIND BUILDERS

Top Wind Turbine Supplier Of 2012: Vestas Or GE?

26 March 2013 (North American Windpower)

“…MAKE Consulting places [the wind turbine original equipment manufacturer (OEM)] Vestas at No. 1 in 2012 and Navigant Research [assigns] the top spot to GE…

“MAKE Consulting says…Vestas ultimately pulled ahead of GE by a narrow 0.9% margin: Vestas held 14.6% of the global market, and GE held 13.7%. If all of GE’s 2012 Brazil-based projects had been grid-connected, however, the firm says the OEM would have beat out Vestas…Navigant Research’s top 10 list…gives the lead to GE, with GE holding 15.5% of the global market and Vestas holding 14%...”

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“Navigant says GE’s progress can be attributed to a rush to take advantage of the U.S.’ production tax credit, and MAKE adds that GE's strong growth in emerging EMEA markets was also essential…[B]oth research firms seem to agree that Vestas still reigns as one of the largest OEMs and that 2012 was a huge year for GE.

“Both reports also say that Chinese market leaders Goldwind and Sinovel slid…Goldwind dropped on both lists from second place in 2011 to seventh place last year…[MAKE says the declines are due to a 26% decrease in Chinese installations, while Navigant says ‘transmission bottlenecks and manufacturing overcapacity’ in the Chinese OEMs’ home markets are to blame…Both reports use the word “strong” when describing Siemens’ 2012 growth…Navigant says Siemens did well in both the U.S. and offshore markets…”

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SUN RISING IN LAND OF RISING SUN

World's 'Most Attractive' Incentives Will Bump Japan's Solar Status

19 March 2013 (Solar Industry)

“The Japanese photovoltaic market is set to grow by 120% this year, with more than 5 GW of new capacity expected, according to a new report from IMS Research (part of IHS Inc.)…[Installations are] expected to exceed 1 GW in the first quarter alone…

“…[Japan's PV market currently benefits from [the world's most attractive PV incentive policy, including a feed-in tariff (FIT) paying up to 42 yen/kWh (but declining 10% beginning April 1), the 5+ GW 2013 forecast would leapfrog Japan ahead of Germany, Italy and the U.S. to become the world’s second biggest PV market]…”

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“…[Though Japan remains a tough market for non-Japanese companies,] domestic PV installations are proving to be a lifeline for struggling Japanese companies that are able to sell both modules and inverters at high margins [despite their lack of competitiveness internationally]…Providers of residential system kits; engineering, procurement and construction contractors; and project developers are also seemingly enjoying the high margins that come with a generous FIT and its resulting high system prices.

“Projects more than 2 MW in size (considered "mega-solar" in Japan) are a major driving force behind the country's triple-digit growth rate, but this trend…[will] decline after 2013…[But commercial rooftops systems] in the range of 10 kW to 50 kW are in very high demand in Japan due to high incentives, high electricity prices, power shortages for commercial properties and relatively simple regulations…”

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SCIENCE PROVED RIGHT ON CLIMATE CHANGE

Climate change models predict remarkably accurate results; Analysis of climate change modelling for past 15 years reveal accurate forecasts of rising global temperatures

Duncan Clark, March 27, 2013 (UK Guardian via The Raw Story)

“Forecasts of global temperature rises over the past 15 years have proved remarkably accurate, new analysis of scientists’ modelling of climate change shows…The debate around the accuracy of climate modelling and forecasting has been especially intense recently…[But the new research] should give a boost to confidence in scientific predictions of climate change.

“The paper…explores the performance of a climate forecast based on data up to 1996 by comparing it with the actual temperatures observed since…The forecast, published in 1999 by Myles Allen and colleagues at Oxford University, was one of the first to combine complex computer simulations of the climate system with adjustments based on historical observations to produce both a most likely global mean warming and a range of uncertainty. It predicted that the decade ending in December 2012 would be a quarter of degree warmer than the decade ending in August 1996 – and this proved almost precisely correct.”

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“The study is the first of its kind because reviewing a climate forecast meaningfully requires at least 15 years of observations to compare against. Assessments based on shorter periods are prone to being misleading due to natural short-term variability in the climate.

“The new research also found that, compared to the forecast, the early years of the new millennium were somewhat warmer than expected. More recently the temperature has matched the level forecasted very closely, but the relative slow-down in warming since the early years of the early 2000s has caused many commentators to assume that warming is now less severe than predicted. The paper shows this is not true…”

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FACT CHECKING ANTI-WINDERS ON ‘ABANDONED TURBINES’

Anti-Wind Lobbyists Claim More Than 1 in 20 Wind Turbines Permanently Inactive. They’re Wrong, As Usual

Mike Barnard, March 3, 2013 (Barnard On Wind)

“…[A myth says] there are 14,000 permanently inactive wind turbines out there somewhere…The 14,000 number has been applied to the entire world, the continental United States and the confines of the state of California…[It is a] flexible and well-traveled myth…[that] started with Andrew Walden, a Hawaiian anti-wind activist in early 2010…[who claimed that in] ‘the best wind spots on earth, over 14,000 turbines were simply abandoned’…[without] any supporting evidence…

“A more realistic maximum number is at most 1% of installed wind turbines — perhaps 2,000 wind turbines — and perhaps 0.1% of generation capacity. And the number of permanently inactive wind turbines is diminishing as they are replaced with working modern turbines…[For] the worst-case ratio of inactive wind turbines…There are about 5,000 wind turbines installed at Tehachapi Pass Wind Farm and of these, approximately 100 are inactive…This ratio is 2%...”

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“…[Tehachapi] is at one of the oldest operational wind farms in the United States, where massive tax breaks combined with immature technology have created one of the highest ratios of inactive to active wind turbines in any location. The majority of the permanently inactive wind turbines were built in the 1970′s and are…being replaced with new generation capacity as part of the Tehachapi Pass Renewable Transmission Project…

“According to the Global Wind Energy Council (GWEC), there are just under 240,000 working wind turbines as of Q1 2013…14,000 wind turbines permanently inactive would represent about 6%...The number of 2% is likely much higher than the world wide reality, but if true would represent roughly 4,800 permanently inactive wind turbines…A more reasonable but still very conservative upper limit of 1% would bring that down to a maximum of 2,400 permanently inactive wind turbines…[About] 0.1% of total wind generation capacity…”

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LEGAL SETBACK FOR MORTGAGE-FINANCED NEW ENERGY

Another PACE Setback: Court Dismisses Suit, Leaving Uncertainty

Jessica Lillian, 26 March 2013 (Solar Industry)

“…Residential property assessed clean energy (PACE) finance, which allows property owners to pay for solar installations and other energy efficiency improvements through their property tax bills, has been essentially sidelined by mortgage-related legal complications for the past few years. Unfortunately, the most recent court decision failed to raise the hopes of PACE supporters.

“Last week, the Ninth Circuit Court of Appeals in California dismissed a case filed by Sonoma County, the State of California and other parties to challenge the legality of action taken by the Federal Housing Finance Authority (FHFA) to curtail PACE back in July 2010…According to the 2010 statement from the FHFA, which serves as the conservator for government-sponsored enterprises Fannie Mae and Freddie Mac, PACE loans pose ‘significant risk to lenders and secondary market entities, may alter valuations for mortgage-backed securities and are not essential for energy conservation.’”

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“At the time, the agency also questioned whether the PV arrays and other systems installed under PACE programs ‘actually produce meaningful reductions in energy consumption.’ The end result for solar energy companies looking to install PACE-funded projects was a series of new rules for handling mortgages on the properties where the solar arrays were to be installed - halting PACE…

“…Sonoma County and the other plaintiffs [will likely] appeal the decision and petition for a larger panel or the Supreme Court to hear the case - a step that must be taken within the next 45 days…PACE advocates could also seek relief in federal legislation…[but a] bipartisan House bill introduced last year to protect PACE failed to result in a companion bill in the Senate…[and] pulling members of Congress into the fray runs contrary to the program's chief identity as a town- and state-level offering that does not require taxpayer funds or other congressional backing…[But] PACE-enabling bills continue to clear legislatures across the U.S…”

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WALMART WANTS WIND

Welcome To Walmart: Wind Energy Is Key Part Of Retailer's Plans

Mark Del Franco, March 21, 2013 (North American Windpower)

“A GE 1.5 MW SLE wind turbine that rises above Walmart's Red Bluff, Calif., distribution center…represents the next step toward reaching the company's goal to eventually obtain 100% of its electricity from renewable sources, such as wind and solar…Walmart has 180 renewable energy projects in operation or under development, and is continuing to test solar, fuel cells, micro wind, off-site wind projects and, more recently, combining wind energy with battery storage…Walmart [also] operates more than 100 distribution centers across the U.S., and…is examining the suitability of other sites for wind power.

“The GE wind turbine supplies 25% of the distribution center’s electricity load. Walmart is buying the electricity generated by the turbine under a 15-year power purchase agreement with Foundation Windpower, which installs, owns and operates the Red Bluff wind turbine…Future wind sites will be determined by the price of electricity, the wind resource at the location, and the available federal and state incentives…”

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“Walmart also feeds electricity back to Pacific Gas and Electric Co. through the utility's net-metering program. However, California caps generating capacity under the state’s net-metering program at 1 MW. Therefore, the GE turbine at the site was de-rated from 1.5 MW to 1 MW in order to qualify for the program…Walmart also participates in the California Self-Generation Incentive Program, which provides an incentive for the installation of distributed generation technologies, such as wind turbines, fuel cells and advanced energy-storage technologies. For wind energy, the incentive pays $1.19/W.

“In addition to on-site generation, Walmart's wind energy initiatives include an off-take agreement to buy approximately 60% of the output from Duke Renewable Energy's 153 MW Notrees wind farm, located in Texas’ Ector and Winkler counties…[T]he Notrees project provides 15% of the power for more than 300 Walmart and Sam’s Club stores…Walmart has also expanded its wind energy initiatives to other countries. In Mexico, wind supplies17% of the energy needed to power 348 Walmart de Mexico stores and fulfills 100% of the electricity needs for 14 Northern Ireland stores.”

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TODAY’S STUDY: THE ENERGY VIEW FROM THE OLD SCHOOL

America’s Energy Resurgence: Sustaining Success, Confronting Challenges; A Report from the Bipartisan Policy Center’s Strategic Energy Policy Initiative

February 2013 (Bipartisan Policy Center)

Executive Summary

As the United States struggles to emerge from a historic recession, energy has emerged as both a bright spot and a source of ongoing challenges for the nation’s long-term prosperity and security. On the one hand, when adjusted for economic growth and inflation, the United States has cut its energy needs by more than 50 percent since 1973, and the trend shows no signs of slowing. Treating this 40-year reduction as the equivalent of new energy supply, the resulting resource is significantly larger than the expansion of output from all other energy resources combined over the same period. In addition, there have been major positive developments on the supply side: Domestic oil, natural gas, and renewable energy production are up, while energy imports are down; new energy development is driving a jobs boom in many parts of the country; and lower energy costs are helping the U.S. manufacturing sector recover.

The combination of these trends means that the nation is arguably more energy secure than it has been in more than a generation. But the news is not all good: Affordable energy is still a challenge for many households and businesses; the oil and gas boom comes with environmental challenges; the electric grid faces hurdles in upgrading infrastructure and integrating new renewable sources; public research and development (R&D) in energy is insufficient to maintain an international competitive edge; and the issues of climate change, global energy market volatility, and competition for energy resources by countries with growing economies remain.

The Strategic Energy Policy Initiative, a project of the Bipartisan Policy Center (BPC) and led by a diverse 20-member Energy Board, was launched in 2011 to build the bipartisan consensus needed to tackle these challenges in the years ahead. Americans are fortunate: The nation has enormous energy strengths, greatly exceeding those of most industrialized nations. Building on these strengths to deliver affordable, secure, and reliable energy in an environmentally responsible manner is the overarching goal of the recommendations outlined in this report. Specifically, we, the Energy Board, believe U.S. energy policy should be designed to advance four core objectives:

(1) pursue a diverse portfolio of energy resources;

(2) improve the energy productivity of the U.S. economy;

(3) accelerate innovation and technology improvements across the energy sector;

(4) improve energy policy governance and accountability.

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It is important to emphasize at the outset that the actions we propose in each of these areas should be viewed as a package—no single Energy Board member necessarily agrees with each individual recommendation in isolation.

Taken together, however, we believe this set of recommendations provides the blueprint for a balanced and effective plan for enhancing the nation’s prosperity, energy security, and sustainable environmental quality in the 21st century.

A critical energy and environmental policy issue is whether the United States should adopt a comprehensive climate change policy to reduce greenhouse gas emissions.

We agree that climate change is a significant issue and addressing it can and should be a matter of bipartisan consensus. It is our view that government policy development and prudent business planning should incorporate cost-effective greenhouse gas emissions reductions, and support market-based efforts to accelerate the integration of low-carbon energy technologies. We call on Congress and the Administration to find a way forward together on responsible and efficient policies to reduce greenhouse gas emissions and to work with other governments in seeking a global approach that both promotes the most cost-effective emissions reductions and addresses the competitiveness issues associated with carbon policy. We look forward to assisting the effort.

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America’s New Energy Landscape

The United States has long benefited from a diversity of energy resources, including a rich endowment not only of conventional fuels, such as oil, natural gas, and coal, but an abundance of renewable energy from water, wind, solar, and geothermal sources. Equally important, the U.S. has an abundance of the innovative capacity, entrepreneurial energy, and technological know-how needed to continuously improve the energy productivity of the economy. Indeed, over the last four decades, energy savings achieved through improvements in energy productivity have exceeded the contribution from all new supply resources in meeting America’s growing energy needs. These improvements have also helped to reduce the domestic economy’s sensitivity to abrupt energy price increases, particularly oil price shocks. Our report highlights the importance of treating demand and supply-side resources on an equal footing, from the standpoint of assembling a resource portfolio that can meet the nation’s future energy needs as cost-effectively and as environmentally responsibly as possible.

On the supply side, meanwhile, dramatic developments in the last decade have already produced a major positive shift in the nation’s energy position and prospects.

The domestic supply outlook for oil and natural gas, in particular, has vastly improved thanks to advances in drilling technology that have made it possible to develop previously inaccessible onshore and offshore resources, including large oil and gas shale plays. Significant progress has also occurred in the renewable energy industry, which responded to state and federal policies by growing at a rapid rate—installed wind energy capacity alone increased 16-fold over the last decade—while driving down cost and improving performance.

Developing America’s abundant indigenous energy resources provides multiple benefits: It spurs local and regional economic activity and job creation; generates revenues for federal, state, and local government; opens the door to potential export opportunities while simultaneously allowing the United States to reduce energy imports; increases the amount of global oil and gas supply from stable sources; and spurs technological innovation that benefits long-term U.S. competitiveness.

Our recommendations focus on expanding access to, and promoting investments in, America’s diverse domestic energy supply resources in environmentally responsible ways, improving the energy productivity of the economy, accelerating energy technology innovation, and overhauling federal energy tax expenditures.

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Pursue a Diverse Portfolio of Energy Resources

Maintaining a diverse portfolio of energy resources requires an energy system that relies on a varied mix of fuels and technologies from diverse geographic areas, as well as continued progress in energy efficiency improvements. A diverse system is inherently more robust and resilient than one heavily dependent on a limited number of resources. Such a system helps insulate the U.S. economy from the supply shocks and price volatility that can affect the market for a particular energy resource. Our recommendations below are organized by major energy resources.

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Oil and Natural Gas

To expand the production of domestic oil and natural gas resources in a manner that protects the environment and addresses the interests of all stakeholders, we recommend the following:

• Congress should expand access to oil and gas exploration and production in the Eastern Gulf of Mexico, and the Department of the Interior should accelerate the timetable for leasing areas off the coasts of the Mid- and South Atlantic states—provided that the areas involved have been reviewed and approved based on a rigorous coastal and marine spatial planning process. Stakeholders should work together to identify substantial new acreage in the Eastern Gulf that could be opened to exploration and production in concert with other, ongoing activities, and request that Congress remove the moratorium in these areas; in both the Eastern Gulf and the Atlantic region, we recommend an open, collaborative and science-based planning approach, and we recommend that in conjunction with such planning processes, the Department of the Interior consider reopening its current five-year plan to include at least one lease sale in the Atlantic.

• Working with all stakeholders, Congress and the Department of the Interior should improve permitting and leasing for onshore oil and gas production on federal and tribal lands by (1) assuring adequate resources; (2) providing consistent requirements; (3) creating a new commission to identify options for regulatory reforms; (4) creating more litigation transparency; and (5) improving the collection and dissemination of statistics for energy projects on federal lands.

• Federal and state regulators should implement the environmental performance recommendations for shale resource development recently issued by the Natural Gas Subcommittee of the Secretary of Energy Advisory Board and the National Petroleum Council…

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Coal

As America’s most abundant fossil fuel resource, coal has played a large role in the nation’s energy portfolio for well over a century.

Coal is expected to maintain a significant role in providing reliable and affordable power to serve the U.S. market, but the industry faces clear challenges in the decades ahead, including low natural gas prices, which are already prompting a shift to gas in the dispatch of existing generators and in building new capacity; new environmental regulations; and the prospect of longer-term carbon constraints.10 Our recommendation aims to accelerate progress on innovations that allow for cost-effective capture, utilization, and storage of carbon:

• The Department of Energy should continue public-private efforts to develop and demonstrate cost-effective, commercial-scale technologies for carbon capture, utilization, and storage and should begin developing a comprehensive, integrated legal and regulatory framework to govern long-term carbon storage…

Energy Exports

Increases in domestic energy production coupled with reductions in demand will result in decreased dependence on net imports of energy. With certain fuels, the changing dynamics of increasing production and decreasing consumption can result in a new opportunity for net exports. Although the United States already exports many domestically produced fuels to some extent, the rapidly changing dynamics for some fuels have raised controversy over the potential for increasing energy exports. While controversy has surrounded other exports, primarily those with potential national security implications, the policy solution rarely has been to abandon completely the nation’s traditional commitment to free trade, as reflected in our recommendation on energy exports:

• Restricting international trade in fossil fuels is not an effective policy to reduce global greenhouse gas emissions or to advance domestic economic interests, and we recommend against any such restrictions…

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Renewable Electricity Production

Wind, solar, biomass, and other non-hydroelectric renewable energy technologies have made remarkable gains in a few short years, roughly doubling their contribution to the nation’s overall electricity supply portfolio—from 2.5 percent of generation to nearly 5 percent of generation—between 2007 and 2011.14 This expansion has been possible as a result of falling production costs and supportive state and federal policies—notably he federal production tax credit and state renewable portfolio standards, which typically require utilities to include a minimum percentage of renewable energy in their supply portfolio.15 Currently, 29 states and the District of Columbia have renewable or alternative energy portfolio standards, and many states as well as the federal government provide tax incentives for renewable energy development.16 Nonetheless, technological, financing, and siting challenges remain. Our recommendations for expanding renewable electricity production focus on three areas (recommendations concerning the renewable energy production tax credit are covered in a later section, as part of a broader discussion of financial incentives in the energy arena):

• The Department of the Interior and other federal agencies should continue to fully fund and implement reforms initiated over the past few years for approving renewable energy projects on federal lands as expeditiously as possible.

• The Department of Defense should continue efforts and initiatives to achieve greater energy efficiency and harness renewable and alternative energy investments in direct support of its national security mission.

• Electric-sector regulators and stakeholders should identify and implement strategies to modernize the grid and enable investment in necessary transmission and non-wires solutions in order to more efficiently integrate renewables into the electric power system…

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Energy-Sector Workforce Needs

All key energy sectors and their stakeholders, including the oil and gas industry, the electric power sector, and the renewable energy and energy efficiency industries, require a highly skilled, well-trained workforce to deliver clean, reliable, and affordable energy to the U.S. economy. Many sectors will face significant workforce challenges due to a rapidly aging employee pool and high future demand for qualified workers. Congress, the executive branch, and stakeholders in industry and academia should cooperate to ensure that these workforce challenges are met and that the proper institutions and systems are put in place to achieve them. We support several specific actions to help prepare for future workforce needs in the U.S. energy sector.

• Congress should direct the Department of Energy and the Department of Labor to work with states to evaluate training needs and facilitate multi-stakeholder energysector training programs.

• Congress should appropriate funds and direct the Department of Energy, the Department of Labor, and the Department of Education to improve existing systems for collecting, managing, and disseminating workforce and educational data.

• Congress should appropriate funds and direct the Department of Labor to identify training standards and best practices for energy-sector jobs.

• Congress should provide support for individuals who seek relevant technical training and experience.

• Congress should reauthorize the America COMPETES Act…

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Nuclear

Nuclear power has been part of the U.S. electricity mix since the 1960s and today supplies nearly one-fifth of the nation’s overall electricity needs.23 But the nation’s fleet of 104 operating reactors is aging and only two new reactors are currently under construction. The question for policy makers, the utility industry, and other stakeholders now is whether the long-term benefits of retaining nuclear energy as a viable, non-carbon component of a diversified energy supply portfolio justify the investments needed to continue to move the technology forward while also addressing long-standing challenges related to waste management, financing, safety regulation, national security, and nonproliferation.

• Broadly speaking, we endorse the key strategic goals set out in the Bipartisan Policy Center’s 2012 report, Maintaining U.S. Leadership in Global Nuclear Energy, and in the report of the Blue Ribbon Commission on America’s Nuclear Future to guide policy makers on this issue…

• The industry and the U.S. Nuclear Regulatory Commission should continue efforts to strengthen nuclear plant safety and security, and provide the industry with regulatory certainty and uniform standards, particularly in light of lessons learned from Fukushima.

• The administration and Congress should act quickly to implement the recommendations of the Blue Ribbon Commission on America’s Nuclear Future (see text box on page 53) and adopt an effective, long-term strategy for managing and disposing of the nation’s spent nuclear fuel and high-level radioactive waste. As a first step, S. 3469, introduced in the 112th Congress by then Senator Jeff Bingaman (D-NM), should be reintroduced and passed.

• Historically, the United States has been a leader in nuclear technology research and commercialization. To extend this tradition and assure further innovation, the United States must continue to support research and development efforts within the nuclear industry, the national labs, and U.S. universities. Specifically, the Board recommends focusing future federal research, development, and deployment efforts on two core areas: reactor safety and small-scale reactors that may be better suited to the diversity of electricity markets and to the regulatory structures that currently exist in the United States. These small-scale reactors potentially could serve installations, complexes, campuses, and other institutional aggregations on a cost-effective basis…

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Alternative Transportation Fuels

Oil plays a critical role in the U.S. energy portfolio and in the broader economy, and it has been at the center of America’s energy security concerns for nearly a half-century. A large share of global oil supplies comes from regions or countries that are either unstable and/or conflict-prone. The U.S. transportation sector remains overwhelmingly dependent on oil, which leaves American consumers and businesses exposed to the fluctuations of the world oil market.25 This exposure exists even with expanded U.S. domestic oil production. In this context, the development of alternative transportation fuels has long been seen as a complement to fuel efficiency as well as a way to improve U.S. energy security and reduce pollution…

Given the potentially large energy security and environmental benefits that could be achieved by increasing fuel diversity in the transportation sector, we recommend continued federal support for R&D to improve fuel and vehicle technology and to address related infrastructure needs. Specifically we recommend the federal government focus its resources in four areas:

• The federal government, by itself or in combination with industry, should pursue sustained investment in research and development for transportation fuels, vehicles, and infrastructure to advance more efficient and cleaner energy consumption in the transportation sector.

• Local, state, and federal governments should continue and expand efforts to encourage early infrastructure investments for those alternative fuel–vehicle systems that offer a path to long-term viability, considering their lifecycle costs and long-term benefits.

• While we have diverse views regarding the Renewable Fuels Standard provisions for conventional renewable fuels, we uniformly believe the nation should continue to develop advanced renewable fuels, and we support the role that the Renewable Fuels Standard can play in promoting these fuels.

• We support longer-term Department of Defense procurement contracts, consistent with the fulfillment of its national security mission, for advanced biofuels and urge the Congress to authorize extended procurement contracts.

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Improve the Energy Productivity of the Economy

Electric Power Sector

Electric utilities play a unique role in improving energy productivity, because they can help drive energy efficiency on both sides of the electric meter. On the customer’s side of the meter, utilities are well-situated to spur the implementation of cost-effective energy efficiency measures across a variety of economic sectors, given their access to customers and consumption data, their technical expertise, and their access to capital. On the utility side of the meter, opportunities exist to improve efficiency in the production, transmission, and distribution of electricity. To capture these opportunities, we support several policies that can spur cost-effective actions. States and local utility boards should:

• Establish utility ratemaking policies that reward investments in cost-effective customer energy efficiency as a distributed resource and remove disincentives to these investments.

• Encourage all cost-effective energy efficiency through Energy Efficiency Resource Standards, incentive programs, and/or resource procurement planning and measure the effectiveness of these policies.

• Encourage the adoption of dynamic retail pricing of electricity and continue to evaluate the use of this option in the residential sector.

In addition, to enhance energy productivity:

• Congress and the U.S. Environmental Protection Agency should design environmental programs that encourage efficiency improvements (e.g., output-based emissions standards that account for both electricity and steam output).

• Congress, the Federal Energy Regulatory Commission, other relevant federal agencies, state public utility commissions, and local utility boards should encourage investment in new, more efficient transmission and distribution infrastructure.

Residential and Commercial Sectors

Residential and commercial buildings account for more than 40 percent of total U.S. energy consumption; despite large productivity gains over the last four decades, both sectors offer significant opportunities for further efficiency improvements.31 Residential energy consumption, for example, is lower today than it was in 1980 on a perhousehold basis, even though the average house size has increased and most households have many more electronic devices than they did a generation ago. Meanwhile, energy consumption per unit of commercial floor space has also declined by roughly 20 percent over the same time period…

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State legislatures should:

• Adopt the latest energy codes and upgrade continually state building standards for new buildings and major renovations, based on life-cycle cost effectiveness. State public utility commissions and local utility boards should:

• Promote demand-side efficiency with improved customer information (e.g., smart meters, dynamic pricing) and other innovative uses of customer information (e.g., comparing energy usage among peers).

• Support state agencies and contractors that administer building codes and standards through encouragement of partnerships with utilities.

Congress and the Executive Branch should:

• Continue to assign high priority to timely issuance of and upgrades to all its statutorily authorized performancebased efficiency standards for appliances, lighting, and equipment.

• Continually upgrade federal model building standards based on life-cycle cost-effectiveness.

• Support the creation of university-based energy efficiency centers.

• Promote energy performance labeling in both new and existing buildings through voluntary programs and/or by utilizing labels as a compliance mechanism for incentive programs.

• Improve and harmonize federal energy efficiency programs, including the Department of Energy appliance standards, the Department of Energy and the Environmental Protection Agency’s ENERGY STAR program, and the Federal Trade Commission’s Energy Guide Program…

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Industrial Sector

…As the economy recovers and business investment rebounds, there will be an important window for promoting investments that offer long-term energy savings in the industrial sector. To some extent, the effectiveness of various policy interventions depends on the timing and the current business environment in which they are applied. Thus, it is beneficial to have an array of policy tools to choose from to match current conditions and industry needs. Our recommendations include a variety of policies and approaches aimed at overcoming barriers to cost-effective industrial efficiency improvements:

• Congress, state public utility commissions, and local utility boards should create incentives and remove disincentives for utility promotion of cost-effective industrial efficiency on-site.

• State public utility commissions and local utility boards should explore the feasibility of including combined heat and power and waste-energy-based generation in state energy efficiency resource standards.

• The Department of Energy should accelerate the development and adoption of cost-effective DOE efficiency standards and establish cost-effective industrial standards for certain types of products (e.g., pumps and other relatively homogenous mass-produced equipment).

• State public utility commissions and local utility boards should create incentives for utilities to implement submetering at industrial and commercial facilities.

• State public utility commissions and local utility boards should support electric utility investment in cost-effective industrial efficiency through grants, loans, training, funding for audits/retrofits, and other programs.

• The Department of Energy, together with state public utility commissions and local utility boards should support utility-industrial partnerships, including dedicated staff to establish energy management best practices and to promote greater deployment of cost-effective efficiency technologies that deliver benefits to utilities and industry.

Transportation Sector

…For decades, the most important policy-driven improvements in vehicle efficiency have been the federal corporate average fuel economy (CAFE) standard. First enacted by Congress in 1975, CAFE standards were substantially increased in 2007; under current law, the average fuel economy requirement for new light-duty vehicles will increase gradually to a target level equivalent to 54.5 miles per gallon by 2025.37 The new requirements will also encourage innovative natural gas vehicles, electric vehicles, plug-in hybrid electric vehicles, and fuel-cell vehicles. According to U.S. government estimates, the new standards will reduce oil consumption by an estimated 2.2 million barrels per day by 2025, which is more oil than the United States imports in net from any one member of the Organization of the Petroleum Exporting Countries (OPEC).38 To further reduce oil consumption and reduce the U.S. economy’s exposure to volatile world oil prices, however, these vehicle efficiency improvements will have to be paired with greater efforts to reduce vehicle miles traveled (VMT) and diversify transportation energy sources. To that end, and in conjunction with efforts to develop and commercialize alternative transportation fuels (discussed earlier):

• Congress, the U.S. Department of Transportation, states, and localities should encourage the adoption of costeffective policies aimed at reducing energy demand for transportation services and should make full use of existing authorities to ensure continuous improvement in fuel economy for new vehicles under, for example, the bipartisan 2007 Energy Independence and Security Act.

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Accelerating Energy Innovation

Technological innovation holds the key to meeting the energy challenges of the 21st century, therefore accelerating the pace of innovation—from early research and development through demonstration and commercialization—must be seen as a central goal of U.S. energy policy. Unfortunately, our nation starts from a position of deficit: measured against other sectors of the economy and other countries, several studies find that the United States is already experiencing a substantial shortfall in overall investments in energy innovation—both public and private—relative to the scale and importance of the national interests at stake.39 Addressing this shortfall is thus one of the most urgent tasks confronting policy makers today; given the current fiscal and economic climate, it is also one of the most difficult. Accordingly, our recommendations for accelerating energy innovation focus on ensuring that federal investments are not only as effective and efficient as possible, but also oriented to promoting private innovation.

• Congress should require a regular, rigorous retrospective review of the Department of Energy’s research, development, and demonstration energy portfolio conducted by an outside body (e.g., the National Academy of Sciences) that includes examining the effectiveness and management of the Department of Energy’s portfolio while also providing options to maximize the benefits from these federally funded programs.

• Congress should significantly increase federal investments in basic and applied energy R&D.

• Congress and federal agencies should, when appropriate, consider mechanisms to leverage public-sector resources to demonstrate and deploy energy technologies.

• Congress should reauthorize the America COMPETES Act, important provisions of which are set to expire at the end of FY2013.

• As a component of the government-wide Quadrennial Energy Review, the Department of Energy should undertake a regular review of its technology programs (a “Quadrennial Technology Review”) to rebalance its energy R&D portfolio and guide budget priorities in light of energy market conditions, technology advances, and emerging national priorities.

• The Department of Energy should reform elements of its institutional structure to prioritize energy innovation. While it may be too early to conduct a robust analysis of the relative effectiveness of ARPA-E (Advanced Research Projects Agency-energy) and other new energy programs and entities, we conclude that many of the organization and management characteristics they are piloting could serve as broad best practices for driving innovation across the department.

• The Department of Energy should take additional action to address intellectual property issues in its funding and collaboration processes.

• The section 1703 Department of Energy loan guarantee program should be maintained and reformed.

• The Department of Defense, in direct support of its national security missions, and other federal departments and agencies should strive for continued improvement in aligning their energy innovation activities with broader national energy goals.

• The Department of the Treasury, the Department of Energy, and Congress should assess the effectiveness of the tax code in spurring private-sector energy innovation.

Federal Interventions in Energy Markets

…we believe the long-term goal should be to phase out all energy-specific tax xpenditure subsidies. Where tax expenditures or similar mechanisms are the best or only available option to address market failures, they should be enacted for only so long as necessary to meet their intended goals with a clear sunset date. Finally, once enacted, these policies should be reviewed periodically and ended if not effective. While we recognize there are numerous debates regarding whether specific tax expenditures constitute a subsidy to a particular industry, these debates are beyond the scope of this report. Rather, we urge Congress to closely consider the full range of tax energy expenditures with the goal of ensuring that mature fuels and technologies compete with one another on a level playing field. Specifically, we recommend:

• As part of broad, comprehensive tax reform, Congress should review the full range of tax energy expenditures and develop a reasonable phase-out plan for those tax expenditures that constitute subsidies for mature fuels and technologies.

With respect to the renewable energy production tax credit in particular, we recommend:

• Congress should extend the renewable energy production tax credit, initially at its current level and develop a specific path to achieve a complete phase-out by the end of 2016.

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Conclusion: Continuing the Bipartisan Tradition in Energy Policy Today

The United States finds itself—thanks in part to technological progress and policy interventions of the last decade—in a stronger position to shape its own energy destiny and with a greater sense of energy security than it has enjoyed for some time. Arguably, the state of U.S. domestic energy sectors, energy productivity, and energy security is the best it has been in many decades. But the country also confronts an array of daunting energy challenges. Tackling these challenges in the midst of a slow economic recovery while addressing an unsustainable federal deficit creates difficult but necessary policy choices—choices that are unlikely to be resolved without the same willingness to work through differences, reconcile regional issues, and reach across political party lines that characterized earlier legislative successes.

Fortunately, Congress has a long history of taking bipartisan action to promote broadly held energy goals. For example, appliance standards were first authorized in 1975 by the Energy Policy and Conservation Act.46 They have since been codified and updated multiple times, each time with bipartisan support. The 2005 Energy Policy Act was passed by a Republican-controlled Congress, while the 2007 Energy Independence and Security Act was passed by a Democratic-controlled Congress; both pieces of legislation were signed by President George W. Bush. As recently as December 2012, Congress passed the American Energy Manufacturing Technical Corrections Act, an energy efficiency bill that amends specific appliance efficiency standards and bolsters industrial and federal government efficiency efforts, with overwhelming bipartisan support.

If the United States can draw on this bipartisan tradition to forge a long-term vision and strategic approach to wisely using its energy resources and technical advantages, we are confident that the goal of achieving a diversified and balanced energy portfolio—one that provides energy security, economic prosperity, and sustainable environmental quality—is well within reach.

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QUICK NEWS, March 27: A WIND OPPONENT PROVED WRONG BY THE MARKETPLACE; THE COST OF THE SAN ONFRE NUCLEAR OUTAGE; APPLE LIKES NEW ENERGY

A WIND OPPONENT PROVED WRONG BY THE MARKETPLACE Wind blowing against Alexander's energy arguments; Sen. Lamar Alexander has long opposed a tax credit for wind energy and thinks that modern windmills are a blight on the landscape, but the sector continues to grow in some areas of the country.

Paul C. Barton, March 26, 2013 (USA Today)

“…[U]tilities, including [Tennessee Republican Sen. Lamar Alexander’s] Tennessee Valley Authority, are finding they like wind power more and more…[but] Alexander, up for re-election in 2014, argues the country needs 100 new nuclear plants to ensure low cost and clean power for the 21st century…[and] has this year renewed efforts to strip the wind industry of a [2.2 cents per kilowatt hour] tax credit, in existence since 1992, for new power it brings on line…[It costs] the federal government about $1.5 billion annually…[but] produce at least $18 in capital investment for every dollar they cost…

“…[Wind farms return far more in tax revenues to all levels of government than they receive in subsidies…And farmers receive lease payments for allowing the turbines on their land, even as they plant and harvest right alongside of them]…In 2012, more wind energy — 13,124 megawatts — was added to the U.S. electric grid than any other form of power. Of all U.S. power, 4% now comes from wind…”

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“…Texas, in fact, is No. 1 in wind capacity with 12,212 megawatts of capacity, followed by California with 5,549 and Iowa with 5,137…Nine states now get 10% or more of their power from wind, with Iowa getting more than 20%. California is on course to get more than a third of its supply from wind by 2020, and a recent Department of Energy study predicted wind could supply 20% of the nation's supply by 2030…

“…[U]tilities, especially in the Midwest, are finding that wind…[from] wind farms of the Great Plains is often cheaper than other power sources, especially at night…[M]any are using wind to displace nuclear…[and] entering into long-term contracts with wind sources as a hedge against future volatility in natural gas and oil prices…[Alexander’s home state TVA has, since 2010,] entered into six contracts that can provide it with a maximum of 1,515 megawatts of…the 34,000 megawatts it has from other sources, primarily nuclear and fossil fuel plants…[and] is contemplating the purchase of an additional 500 megawatts…”

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THE COST OF THE SAN ONFRE NUCLEAR OUTAGE Extended nuclear plant outages raise Southern California wholesale power prices

March 26, 2013 (U.S. Energy Information Adminstration)

“The outages of both units at Southern California Edison's San Onofre Nuclear Generating Station (SONGS), starting in January 2012, have created a persistent spread in wholesale power prices between Northern and Southern California.

“Historically, wholesale power prices for Northern and Southern California tracked closely with one another, indicating minimal market differences between the two areas. However, after the shutdown of SONGS in early 2012, the relatively inexpensive nuclear generation produced by SONGS had to be replaced with power from more expensive sources. Consequently, since April 2012 Southern California power prices have persistently exceeded Northern California prices, with the spread averaging $4.15/MWh, or 12% of the Northern California price.”

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“Relative differences in natural gas prices do not seem to be driving the gap between Northern and Southern California power prices…[T]his difference accounts for less than $1 per megawatt-hour…[H]igher wholesale power prices in Southern California more likely are attributable to the need for more-expensive generation…in the densely populated Los Angeles and San Diego regions…[where] alternative sources…are more expensive…

“In 2012, the continuing SONGS closure put pressure on the electric power grid operator, the California Independent System Operator (CAISO), to adjust both generation and transmission in order to meet summer demand for electricity, and in general, continues to change the generation profile in the area…[CAISO has] requested changes to a transmission constraint rule in an attempt to resolve transmission congestion that is contributing to higher prices…[Restarting SONGS]…requires the approval of the Nuclear Regulatory Commission (NRC)…[which is expected] after May 2013.

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APPLE LIKES NEW ENERGY Apple Inc. Powering Data Centers With 100% Renewable Energy

26 March 2013 (North American Windpower)

“Technology giant Apple Inc. says that all of its data centers now use 100% renewable energy, including power from wind, solar, geothermal and hydro resources…[It has also achieved use of] 75% renewable energy [at its facilities] worldwide - through a combination of on-site solar and fuel cell projects, renewable energy credits, and direct purchase of electricity from renewable energy projects.”

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“In California, for example, Apple is powering its Newark data center and Cupertino corporate headquarters with wind energy purchased from nearby wind farms. [According to its current environmental footprint report, Apple] will continue developing and procuring renewable energy until all of its facilities run on 100% renewables.”

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TODAY’S STUDY: CHINA’S NEW ENERGY FINANCING GAP

Shaping China’s Climate Finance Policy

March 2013 (The Climate Group)

INTRODUCTION

China, like many countries, is grappling with the challenge of how to finance the transition to a sustainable, low carbon economy. Complicating this challenge is the fact that the country is still going through the twin processes of industrialization and urbanization. As a result, many institutions – both public and private – have been focused mainly on poverty reduction or material imrovement.

Environmental protection and sustainable development by contrast have tended to rank further down the list of institutional priorities. In addition, the shift towards a market based economy is on going, which means the government continues to act as the key player in the economy. The net result is a financing system that does very well in some respects (eg, rapidly moving large sums to strategic industries when needed), but underperforms in others (eg, efficient allocation).

Despite this, much has been achieved in terms of financing low carbon development in China. The economy’s carbon intensity has fallen dramatically over the last 20 years through energy efficiency improvements, and more recently through the expansion of renewable energy. Public sector financing – through direct government spending and the investment of the large state-owned banks – has been instrumental in making this happen. China’s prodigious domestic savings rate (currently around 50%) has provided the state banks with huge volumes of low-cost funds.

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But the scale of change still required in China is enormous. Public funding – as it is currently managed and used – will be insufficient to the task. As government funding for social services increases and as the economy moves away from saving towards greater consumption, the challenge will only increase. China therefore needs to reform both its public and private financing systems if it is to adequately finance climate action, restructure its economy and build the ‘eco-civilization’ its leaders have called for. In practice, this means: a) better management and efficient use of public funds, and b) the creation of the necessary frameworks and incentives for driving private sector capital (domestic and international) away from high carbon investment and into low carbon assets and developments instead.

The remainder of this briefing is in four main parts. The first gives an overview of current sources, institutions and applications of climate finance in China, while the second looks at the challenges ahead. The third section identifies options for improving the system, while the fourth looks at ways of widening sources of climate finance.

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OVERVIEW: CLIMATE FINANCE SOURCES

Climate finance in China comes from both domestic and foreign sources, which can be grouped into five basic categories:

— Public finance (domestic and international)

— Carbon market finance (essentially through the Clean Development Mechanism)

— Mainstream private sector finance (such as domestic and foreign bank loans)

— Direct investment (domestic and foreign)

— Charitable and NGO finance

Figure 1 on the following page illustrates the flows and relationships of these different sources. Domestic climate financing currently dominates total investment, as highlighted in Table 1 below. China’s state-owned banks in particular play a central role. At the end of 2011, the climate finance loan balance from these public institutions totaled approximately US$294 billion. Direct government climate spending was around US$41 billion for the year by comparison, while private sector investment was at least $US10 billion. Green bonds, private equity (PE), venture capital (VC) and stock market listings through initial public offerings (IPOs) all played a role. These domestic figures dwarf overseas sources of climate finance, both public and private. OECD government funding between 2006 and 2009, for example, was around US$1.68 billion. Multilateral funds meanwhile provided just US$0.29 billion for the period 2008-12. The extent of foreign private sector debt financing for climate action is unclear, but is likely to only account for a fraction of the US$70.5 billion of total foreign lending that occurred in 2011. The UN’s Clean Development Mechanism (CDM) has been a more significant source of low carbon financing, pulling in an estimated US$9.3 billion up to 2012.

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MAJOR CLIMATE FINANCE INSTITUTIONS

Figure 2 on the following page identifies the main domestic and foreign institutions that are involved in climate finance in China. The relative importance and roles of these institutions continue to shift as China’s economy grows and its climate financing needs become more sophisticated.

Bilateral institutions, for example, have grown less important as a source of funds, not least because China itself has become a provider of climate finance to poorer developing countries. Relationships with developed countries, meanwhile, are now increasingly based around strategic partnerships, rather than a ‘donor-recipient’ model. Engagement with multilateral institutions is also changing.

Although the World Bank Group has played a limited role in climate finance in China, other multilateral banks, such as the European Investment Bank, are now providing funding on favorable terms.

Domestically, climate financing remains at a relatively immature stage among some state institutions. China’s state-owned banks, for example, consider climate related investment as a corporate social responsibility issue and have yet to include climate impacts as key considerations of business development. However, the China Energy Conservation and Environmental Protection Group, an important policy investment platform, is a major investor in energy efficiency and clean energy technologies. It has developed a number of industrial parks dedicated to showcasing energy saving and environmental protection industries.

Commercial financial institutions are also beginning to provide climate related services and products. Some large commercial banks have established carbon asset management services and funds to make direct or indirect investment into emission reduction programs. As China begins to develop its own domestic carbon market, these organizations will also play a key role, helping to develop the secondary financial instruments, such as options and futures that are needed for the efficient functioning of the market. Insurance companies have an important role too. Specialized agricultural insurances companies, for example, have started to offer climate insurance, although this is still a very new and niche market. And, as institutional investors, insurance companies can have a major impact by directing their investments towards low carbon businesses.

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APPLICATION

To date, most climate finance in China has been directed towards mitigation activities, particularly for renewable power and energy efficiency. Over the course of the 11th Five Year Plan (FYP) (2006-10) for example, China invested approximately US$256 billion5 in the new energy sector and US$127 billion in energy efficiency. Under the 12th FYP (2011-15), the government has estimated a need for close to US$800 billion of investment in clean technology, renewable energy, energy efficiency and environmental protection. The majority of this funding will come from the private sector with the government expecting to leverage four times as much private capital for every Yuan of public funding it invests.

Private capital has followed public finance into mitigation sectors. Unsurprisingly, investment has gone where returns have been the greatest. This has meant more funding for renewable power, such as wind and solar, clean tech manufacturing and industrial energy efficiency. Less investment has gone into energy conservation for buildings and transportation, which have required higher upfront costs and longer payback periods.

Flows of capital for adaptation have been much lower than for mitigation. Incomplete disclosure of information makes it difficult to estimate the overall scale of national adaptation investment. However, a review of relevant accounts in the national budget suggests that public expenditure was about US$7.5 billion in 2012. It is clear that this public investment plays a major role, with funding going into agriculture, water resources, marine management, health and meteorological activities.

The fact that much of this could be considered as traditional infrastructure investment, underlines why it is difficult to distinguish additional climate adaptation spending. A recent development in China’s climate financing regime has been the emergence of China as a donor and financier to poorer developing countries. In 2011, a ‘South-South’ Cooperation Fund of around US$31 million was established to support capacity building and donate energy saving products. China’s state banks have also been active. The China Development Bank10, for example, has a special loan facility of US$774 million for small and medium enterprises (SMEs) in 29 African countries…

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CONCLUSION

The purpose of this briefing has been to provide an overview of the main elements and challenges that define the climate finance landscape in China today. It is clear from preceding pages that China faces a variety of challenges. These must all be addressed if the country is to finance the transition to a sustainable, low carbon economy over the coming decade and beyond. But the main conclusion is undoubtedly that the solutions to China’s climate financing gap can be found in the hands of its policy and decision makers.

Although the gap in finance identified is a substantial figure, it is also true that it represents around a relatively modest 2% of GDP. As this summary (and the original Chinese report) demonstrates, China’s leaders have the tools to close this gap. Reforms in public funding governance, and new or improved incentives for private sector institutions and investors, can create the environment that shifts investment from high to low carbon activities.

Because of China’s economic and political influence, these domestic reforms will have global implications. They will of course benefit China directly by attracting greater foreign investment as improved transparency and clearer incentives lower risks for overseas financial institutions. But they will also send a powerful message to both investors and other governments about the direction of China’s economy. By moving now in implementing reforms, China could create the tipping-point in global financial and political attitudes towards low carbon investment.

The good news is that China’s transformation over the past three decades has demonstrated its ability to deliver profound economic and social change when the right incentives and frameworks are in place. If China is to build the ‘eco-civilization’ its leaders have called for and restructure its economy around the principles of sustainable development, then implementing the kind of financial reforms and recommendations laid out in this briefing will be essential. As with so many issues relating to China, this matters not just to its own future prosperity, but to the world’s as well.

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QUICK NEWS, March 26: GOOGLE WANTS MORE WIND; MINNESOTA SOLAR STANDARD MOVES AHEAD; CHEAPER TO SCRAP SAN ONOFRE THAN RESTART IT

GOOGLE WANTS MORE WIND Thanks To PTC Extension, Google 'Actively Looking' To Procure Wind Energy

12 March 2013 (North American Windpower)

“Encouraged by the extension of the production tax credit (PTC), Google will continue to work with utilities to procure wind energy to power the company's data centers…[T]he company is actively looking at wind projects in the Midwest…

“Google is leading a growing number of industrial users that serve as wind power off-takers. According to the American Wind Energy Association, at least 18 companies purchased wind energy under long-term power purchase agreements (PPAs) or direct ownership from on-site generators. At least 11 schools and universities, as well as eight towns or cities, also joined the list of nontraditional power purchasers.”

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“Google’s initial foray into wind energy procurement dates back to 2010, when the company worked directly with NextEra Energy Resources…[T]he company has since refined its approach to wind energy procurement [taking direct delivery at its data centers]…Google has also invested $1 billion in renewable energy projects, such as the 845 MW Shepherds Flat wind farm, located in Oregon; the massive Alta Wind Energy Center, located in Southern California; the Atlantic Wind Connection, a proposed transmission backbone for offshore wind projects; and four solar photovoltaic (PV) plants in Southern California.

“Although Google has a 1.7 MW solar PV installation at its Mountain View, Calif.-based headquarters, the company is waiting until costs decrease before making more investments in solar…Google’s commitment to sustainable energy is part of the company's goal of becoming carbon neutral…”

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MINNESOTA SOLAR STANDARD MOVES AHEAD The Making of a Midwestern Solar Energy Standard

John Farrell, March 14, 2013 (Institute for Local Self-Reliance)

“…[The Minnesota state legislature House Energy Policy Committee] voted 8-6 to approve a 4% by 2025 solar energy standard, with an innovative new approach to financing solar power. It’s a powerful first step for what would be one of the more robust policies to support distributed, local solar power in the country…

…[The] Solar Standard…sets a timeline for utilities to add solar to their electricity mix…0.5% of electricity sales by 2016…2.0% of electricity sales by 2020…4.0% of electricity sales by 2025…And, an “objective” of 10% solar by 2030…[but it] is not a carve-out of the existing 25% by 2025 renewable energy standard…”

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“…[T]he legislation [also] requires utilities to mimic the VOS calculation popularized by Austin Energy in Texas, essentially setting a market price for solar power (per kilowatt-hour) on the basis of its value [in seven ways] to the grid…Line loss savings from avoided electricity imports on the transmission and distribution grid…[S]avings from avoiding upgrades to transmission and distribution…[S]avings from reducing wholesale energy purchases…[S]avings from offsetting the need for new (peak) capacity…Fuel price hedge value from a zero fuel cost…Environmental benefits…Economic benefits from the growth of the state’s solar industry…”

“The VOS price will be combined with a production-based incentive (PBI) to offer solar energy generators a price sufficient to provide a reasonable return…Utilities must develop and use a standard [20 year] contract…This dramatically simplifies the financing and development of distributed solar…[growing] a diversity of utility-scale and distributed solar…[The standard] promises to deliver over 2,100 megawatts of solar power…create over 8,000 jobs and…[add] $5.8 billion in the state’s economy in the next decade….[at] a forecast blended cost per kilowatt-hour (for the incentive) of just 2.7¢ per kWh…”

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CHEAPER TO SCRAP SAN ONOFRE THAN RESTART IT San Onofre: Restart plan would cost customers $150M more than replacement power; Edison financials show keeping reactor shut down three times cheaper than startup

Adam Russell, March 22, 2013 (Friends of the Earth)

“…[After both reactors at the crippled San Onofre nuclear power plant being offline for 14 months, restarting one of them] this summer would cost Southern California Edison’s customers three times as much as keeping it shut down and buying [readily available] power from other sources, according to an independent analysis commissioned by Friends of the Earth.

“In an emergency motion filed today with the California Public Utilities Commission, Friends of the Earth said Edison’s own figures show that restarting reactor Unit 2 and running it at partial power for five months, as the utility proposes, would cost almost $150 million more than buying readily available replacement power on the open market. If Edison can’t justify that cost, the group said, the PUC should rule at once that Edison cannot pass those costs on to consumers, which could lead to Edison deciding to keep it closed…”

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“The analysis…found that Edison’s publicly reported cost of operating San Onofre in 2012 was $640 million -- an amount charged to customers even though the plant produced electricity for just one month. The cost of replacement power was $175 million for the year. Scaling Edison’s figures to five months of operation shows that operating Unit 2 would cost about $214 million, versus $66 million for replacement power…

“…Friends of the Earth asked the PUC to…[to require of Edison] a cost-benefit analysis for its restart plan within two weeks…[T]he issue is an emergency because the Nuclear Regulatory Commission has indicated that it could rule as early as May whether to allow Edison to restart the reactor and run it at 70 percent power for five months -- an untested experiment that could further damage the plant’s severely worn steam generators -- this damage already caused the release of radioactive steam in January 2012…”

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